Price of Crude Oil Tumbles After Soaring for 3 Days

HOUSTON — After three days of spiking oil prices, a barrel of crude tumbled back nearly 8 percent on Tuesday, renewing despair in the oil patch. At the same time, ConocoPhillips announced it was cutting its global work force by 10 percent.

The two events were not directly linked, but they combined to reinforce the widespread notion around the oil fields and corporate headquarters in cities like Houston and Oklahoma City that the declining fortunes of the industry will not reverse anytime soon.

“Our industry is undergoing a dramatic downturn,” Daren Beaudo, a ConocoPhillips spokesman, said in an email statement. “As we have assessed the implications of lower prices on our business, we’ve made the difficult decision that work force reductions will be necessary.”

The company will cut 1,800 employees, most of them in North America. More than 500 of ConocoPhillips’s 3,750 employees in Houston, the company’s base, will be cut, and another 400 will lose their jobs in Canada. The company had already cut 1,000 jobs this year.

The job cuts are part of a general restructuring that includes reductions in future deepwater exploration.

Before the ConocoPhillips announcement, at least 176,000 oil workers had lost their jobs globally since 2014, according to Swift Worldwide Resources, an oil and gas recruitment agency.

There have been a scattering of bankruptcies in the industry, and a growing number of companies have already suspended their dividends or sold off assets at bargain-basement prices to pay interest on their debts.

Oil markets have been whipsawed in recent days by contradictory reports.

On Monday, a commentary accompanying an OPEC market report suggested that the cartel was willing to sit down with non-OPEC producers to shore up prices. With Venezuela already talking to Russia about how to stabilize the market, some traders concluded that perhaps Saudi Arabia and its Persian Gulf allies were rethinking their strategy of pumping more oil even as prices were falling.

At the same time, data released by the Energy Department this week showed that domestic oil production may have peaked at 9.6 million barrels a day in April and has since fallen by more than 300,000 barrels a day. If that trend were to continue, a drop of as much as a million barrels a day of American production could come off the global market by late next year, relieving the current glut.

But on Tuesday, the American Petroleum Institute reported a large rise in domestic crude stocks. With the summer driving season drawing to a close and refineries preparing to shut down for maintenance, those inventories can be expected to build, and prices typically decline when they do.

Wall Street analysts treated the recent spike in oil prices — which surpassed 20 percent over the three trading days from last Thursday through Monday — with caution if not derision.

Several warned that there was no sign that Saudi Arabia was about to cut production, and said that traders were being motivated more by fear than reasonable analysis.

“Sharp gains over the past three trading sessions were driven by a combination of short covering and chart readers again looking to call a bottom falsely,” according to a Citi Research investment note this week.

The American benchmark price for oil dropped 7.7 percent, to $45.41 a barrel on Tuesday. The global benchmark fell 8.5 percent, to $49.56 a barrel. Both are less than half the levels of last summer.

Many analysts say that the price of crude could drop another $10 in the short term, especially if the Chinese economy continues to slow. That would be good for consumers, who could see the national average price for a gallon of regular gasoline decline to $2 in many parts of the country over the next few months.

But at current prices, the glut is probably not sustainable. Much of the oil produced around the world is no longer profitable — particularly in the Canadian oil sands and deepwater fields around the Western Hemisphere and Africa.

Already, companies are dropping their investments in long-range projects, and recent auctions for offshore fields held in Mexico and the United States have attracted little interest.

A sharp drop in drilling in American shale fields has not led to a significant reduction in production. But that is likely to change in the coming months, since the productivity of the typical shale oil well declines by more than 60 percent after its first year in production.

A version of this article appears in print on , on Page B1 of the New York edition with the headline: Oil Tumbles After Spiking for 3 Days. Order Reprints | Today’s Paper | Subscribe